(Reuters) - BlackRock reported record assets under management (AUM) of about $10.5 trillion in the first quarter and posted a 36% jump in profit on Friday as a rebound in global equity markets boosted its investment advisory and administration fees.
Global equity markets rallied in the first quarter as expectations grew that the world's major central banks were done with monetary policy tightening and would pivot to rate cuts, resulting in a jump in AUM. The company's AUM jumped 15% in the first quarter from a year earlier, while investment advisory and administration fees, typically a percentage of AUM and BlackRock's chief source of revenue, climbed nearly 8.8% to $3.63 billion.
Shares of the world's largest asset manager were up 2.6% in premarket trading.
However, total net inflows fell to $57 billion from $110 billion a year earlier. Inflows continue to be soft as clients sit on the sidelines waiting for interest rate cuts to begin before dipping back into risky assets.
Analysts expect asset management industry flows to re-accelerate after interest rate cuts begin, as that would incentivize the movement of cash piles currently on the sidelines into risky assets.
The company's total revenue jumped 11% to $4.73 billion in the quarter, driven by higher performance fees and technology revenue as well the impact of higher markets on average AUM.
BlackRock provides investment management and technology services to retail and institutional clients globally that includes sovereign wealth funds, insurance companies, and large corporations among others.
Its technology revenue jumped about 10.9% to $377 million, reflecting sustained demand for its Aladdin investment management platform.
Net income for the company rose to $1.57 billion, or $10.48 per share, in the three months ended March 31, from $1.16 billion, or $7.64 per share, a year earlier.
Shares of BlackRock were down about 3.2% this year, underperforming the benchmark S&P 500 index, which is up 9%.
By Reuters
Reporting by Arasu Kannagi Basil in Bengaluru
Editing by Shinjini Ganguli
